Tuesday, July 05, 2005

Capitalism Rocks

Yeah, yeah, yeah! especially in poorer countries. Just look what capitalism has done for South Korea and Taiwan and what is happening in China and India. On the flip side are North Korea, Cuba and most of Africa. These economic and human disasters share a common demographic, ie rule by a megalomaniac like Kim Il Sung, Fidel Castro or Robert Mugabe. The lesson is that wherever capitalism is allowed to flourish, it does so and poor people prosper.

That reminds me of the Live8 rock-fest that kicked off last weekend. “Sir” Mark Steyn pinpoints the mortal flaw of the Live8 bonanza. At the first LiveAid bananarama two decades ago, “Sir Bob (Geldof) was at least demanding we give him our own fokkin' money. This time round, he was asking that we join him into bullying the G8 blokes to give their taxpayers' fokkin' money.”

Steyn again: “I love old rockers - not for the songs, which are awful, but for their business affairs, which so totally rock. In 1997, David Bowie became the first pop star to hold a bond offering himself. Once upon a time, rock stars weren't rated by Moody, they were moody. Today these faux revolutionaries are capitalists red in tooth and claw. The system that enriched them could enrich Africa. But capitalism is the one cause the poseurs never speak up for. The rockers demand we give our fokkin' money to African dictators to manage, while they give their fokkin' money to Winthrop Stimson Putnam & Roberts to manage.”


President Bush announced last week that the U.S. would be doubling aid to Africa. He had already agreed to cancel the debts of the world's poorest countries and to give $15B to combat the AIDS epidemic in Africa.

But the socialists at G8 won’t be satisfied since the principle US approach relies far too much on that nasty capitalism.

What they want is protectionist tariffs for agriculture in the Third World that would raise food prices in those countries, penalizing the poorest, and choke off trade with the West, thus reducing economic opportunities for poor producers. The G8 approach is for government controls and against markets -- ignoring the fact that government in poor countries is very often corrupt. It wants more aid instead of more trade -- ignoring the fact that aid goes to governments and strengthens their power, whereas trade benefits the hardworking poor. It wants to stop privatization programs -- ignoring the fact that government monopolies in the Third World are treated as private bank accounts by the government.

Aid should be made conditional on ending corruption in government, as Bush has rightly seen, but also on protecting the property rights of the poor. (John O’Sullivan, Chicago Sun Times.)

The U.S. approach is based on the Millennium Challenge Corporation, described thus by the Economist (7/23 issue):

"Other donors tend to focus on tear-jerking issues such as AIDS, or on boosting the budgets of the better-run poor-country governments so they can provide better public services. The MCC seeks to promote economic growth in those countries--which is more complicated and takes more time."

A new paper from the International Monetary Fund finds that aid does little to promote economic growth. And economic growth is by far the most effective way of alleviating poverty in the developing world. A World Bank study of growth and poverty in 14 developing countries found that poverty dropped in the 11 countries that experienced substantial growth, and rose in the three that saw little or no growth.

It will be interesting to watch the G8 conference this week to see if the other nations are willing to let capitalism work or prefer to impose socialist policies. In spite of all the evidence, I’m not very hopeful.

6 Comments:

Anonymous Anonymous said...

I was listening to the radio this morning and I heard of some interesting stories coming out of the Live8 concert...performers received $12,000 gift baskets; backstage they feasted on, among other delicacies, lobster; egos got bruised here and there esp. between McCartney & Beckham's...etc., etc. Bob Geldolf was quoted as saying, "we must do something even if it doesn't work"...

WHAT? You want me to give my hard earned money to something that may not work?! You will be happy just to do SOMETHING...ANYTHING, Mr. Geldolf, no matter the outcome? That's exactly the problem. Billions of $$ have been poured into Africa, for example, and look at that place. It's worse than ever -- not because of a lack of money but because the continent is ruled by despots, dictators who allow their people to suffer while they seize money and supplies that are donated. We don't need to forgive the debt -- unless the people demand a change in leadership the big 8 will most likely never see any of their loans paid back anyway.

This is why I think we, as individuals, will do better work if each of us who is truly interested in making changes for those who suffer, just get out there and do it ourselves! I want to know exactly where my money is going and who is profiting from it. There was a statement made that the original Live Aid did more damage than good because people felt that after that concert effort everything would be better and so they (people) stopped doing anything. It's a "feel good" thing to support these kinds of efforts and then go away and forget about what the real purpose was.

Awareness is good but I'd rather see the multi-million dollar artists doing something with their pocketbooks rather than their talent (which they get to write off as a tax deduction for this "benefit").

If anything gets done to help the world, it will be through us as individuals I believe. It is foolish, imho, to keep thinking that BIG government(s) or big benefits will do anything solid that will help those who are starving and face death everyday. One makes the difference, one by one...that's an old example set by Jesus Christ Himself.

12:45 AM  
Anonymous Anonymous said...

I was listening to the radio this morning and I heard of some interesting stories coming out of the Live8 concert...performers received $12,000 gift baskets; backstage they feasted on, among other delicacies, lobster; egos got bruised here and there esp. between McCartney & Beckham's...etc., etc. Bob Geldolf was quoted as saying, "we must do something even if it doesn't work"...

WHAT? You want me to give my hard earned money to something that may not work?! You will be happy just to do SOMETHING...ANYTHING, Mr. Geldolf, no matter the outcome? That's exactly the problem. Billions of $$ have been poured into Africa, for example, and look at that place. It's worse than ever -- not because of a lack of money but because the continent is ruled by despots, dictators who allow their people to suffer while they seize money and supplies that are donated. We don't need to forgive the debt -- unless the people demand a change in leadership the big 8 will most likely never see any of their loans paid back anyway.

This is why I think we, as individuals, will do better work if each of us who is truly interested in making changes for those who suffer, just get out there and do it ourselves! I want to know exactly where my money is going and who is profiting from it. There was a statement made that the original Live Aid did more damage than good because people felt that after that concert effort everything would be better and so they (people) stopped doing anything. It's a "feel good" thing to support these kinds of efforts and then go away and forget about what the real purpose was.

Awareness is good but I'd rather see the multi-million dollar artists doing something with their pocketbooks rather than their talent (which they get to write off as a tax deduction for this "benefit").

If anything gets done to help the world, it will be through us as individuals I believe. It is foolish, imho, to keep thinking that BIG government(s) or big benefits will do anything solid that will help those who are starving and face death everyday. One makes the difference, one by one...that's an old example set by Jesus Christ Himself.
Dori Medina

12:46 AM  
Anonymous Pamela Cleveland said...

Thomas Friedman recently devoted to columns to the boom of Ireland's economy. Ireland today is the richest country in the European Union after Luxembourg.
"... the government, the main trade unions, farmers and industrialists came together and agreed on a program of fiscal austerity, slashing corporate taxes to 12.5 percent, far below the rest of Europe, moderating wages and prices, and aggressively courting foreign investment. In 1996, Ireland made college education basically free, creating an even more educated work force.
Today, 9 out of 10 of the world's top pharmaceutical companies have operations here, as do 16 of the top 20 medical device companies and 7 out of the top 10 software designers. Last year, Ireland got more foreign direct investment from America than from China. And overall government tax receipts are way up."
Dell and Intel set up in Ireland.
Capitalism does work! So France and Germany put that in your pipes and smoke it!

5:08 AM  
Anonymous pamela said...

Silly me: to=two. And I even proof-read it! :)

5:09 AM  
Anonymous Anonymous said...

this just goes to show you that these artists (hard to use that term) are more concerned about thier self image then about doing any good. giving aid is GREAT but it is not our governments place to give charity.....that has to come from the citizens. By the way. anybody hear madonna sing "ray of light" at the live8? horrible..hilarious.... if you havn't heard it and want a laugh i suggest listening to it

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